Tuesday, 21 June 2016

EU Referendum Briefing 6: A Bonfire of Rights? EU Employment and Equality Law after Brexit

Professor Steve Peers

It’s been suggested that there
would be a ‘bonfire of rights’ if the UK left the EU – in particular rights
relating to employment and equality. As a response, some have suggested that
the EU has nothing to do with employment and equality law in the UK – that all
such rights are actually home-grown.

As I will demonstrate in detail in
this blog post, it is undeniably the case that EU law has significantly raised the
level of employment and equality rights in the UK – particularly as regards
equality for women in the workplace.

My study of all the cases
reaching the EU court concerning UK law on these issues shows that 60% of all
the EU court cases about equal treatment of women in Britain resulted in a finding
that UK law breached EU law – therefore raising the standards of protection for
women in the workplace. 62% of the other cases on workers’ rights led to the
same result.

As for what would happen in the
event of Brexit, we cannot be absolutely certain – but a large number of the
most prominent supporters of Brexit have admitted in detail their intention to
lower those standards.

I’ll first summarise the main
points, and then set out the facts in detail.

Summary

The EU has not set uniform standards
on every aspect of employment and workplace equality law – and it never will. Its role, according to the Treaties, is to set
minimum standards in certain areas of
employment and equality law. So where the EU hasn’t acted at all – such as on
zero hours contracts, trade union laws or minimum wages – Member States can do
as they like. The blame (or credit) for the choices which the UK makes on those
issues must go entirely to this country’s government.

On the other hand, where the EU has acted – such as on holiday pay and equality
in the workplace – Member States can set higher
standards, but not lower ones. The EU rules in effect set a floor below which
Member States can’t go; but there is no corresponding ceiling.

It’s been argued during the
referendum that because the UK has sometimes adopted laws on certain employment
or equality issues before the EU did, the EU therefore added nothing. This
argument profoundly misunderstands the law in this area. Just because the UK
put the Equal Pay Act on the statute books before it was covered by EU laws on equal
pay for men and women doesn’t mean that those EU laws had no added value. That’s
because British laws in this area have often contained many exclusions or
exceptions, and EU law has often removed them.

In this blog post, I prove that
point by looking at every single ruling of the EU court concerning UK law on
employment or equality issues. As I noted in the introduction in 60% of cases, regarding
women’s equality at work, and 62% of other workers’ rights cases, UK law fell below
EU standards.

In practical terms, this
increased protection regarding (among other things): equal pay for work of equal value for women; protection
at work during pregnancy and maternity leave; better protection of pensions
when an employer goes broke; and extension of paid holidays to include more
workers.

However, a significant number of
the relevant laws have been targeted for removal by serious supporters of
Brexit.

In conclusion, European Union law
has significantly increased the level of protection in a number of areas of employment
and equality law. Leaving the EU would not automatically mean that those protections
are lost, but they would no longer be guaranteed – and many of the most senior
figures supporting Brexit have expressed their intention to remove some of
them.

Detailed analysis

The following analysis looks at
(a) the main features of EU involvement in employment and equality law; and (b)
the prospect of the rules stemming from EU law being repealed after Brexit.

Mainly the EU’s impact in this
area has been in the form of laws that set minimum standards on some workers’
rights issues, and on discrimination against workers on some grounds. EU law
also bans discrimination outside the workplace on grounds of sex or race. In a
lot of these areas, the UK had its own laws beforehand. For instance, the Race Relations Act dates back to 1965.
However, there have been some areas where UK law changed because of a new EU
law which the UK implemented, or because of a ruling of the EU courts, or the
UK courts interpreting EU law. A complete list and summary of all the relevant EU
court cases is set out in the Annex. Some of the key cases are discussed
further in the main part.

While some argue that the rights
concerned anyway derive from Conventions (international treaties) agreed within
the framework of the International Labour Organisation (ILO), ILO treaties are
not enforceable in British law. The very fact that the EU court has ruled on UK
breaches of EU employment and equality law proves that the existence of ILO
treaties does not by itself guarantee employment or equality law protection in
individual cases.

Employment law

The EU does not deal with every
employment law issue. In fact, it can’t. The EU treaties rule out any EU laws
on pay or trade union rights. So there are no EU laws on those issues, although
in some cases the EU has an indirect impact on these topics. There are also some areas where the EU could
act if all Member States agreed, such as rights on the termination of
employment. But it is hard to reach unanimous agreement on employment law
issues, and so there are few laws in these areas either.

What topics does EU law address?
First and foremost, there are a number of EU laws on health and safety. The most prominent of these is the law on
working time, which guarantees a minimum amount of four weeks’ paid
holiday. Although the UK had a law in force on this issue before the EU law, it
did not guarantee paid holidays for all workers. The EU court case law has specified
in particular that the UK has to ensure paid holidays for fixed-term workers (BECTU), and to include allowances (Williams) and commissions (Lock) in holiday pay.

Next, there are EU laws on major
changes to workers’ employment
contracts. In particular, there are EU laws on three issues: rights in
the case of mass redundancies; rights when an employment contract is affected
by the transfer of the employer; and rights when a business goes broke.

The mass redundancies law doesn’t ban or limit the grounds for
redundancies, or provide for rules on redundancy payments – so the UK and other
EU countries can regulate those issues however they want to. First and
foremost, this law it sets out a waiting period before large numbers of
redundancies can be made, once the employer has decided in principle to make a
lot of its workers redundant. The employer must give a detailed explanation of
its plans to the workers who are set to lose their jobs. During the waiting
period, the workers’ representatives and the employer must hold discussions
with a view to helping as many affected workers as possible, for instance by
saving jobs or retraining. If the employer fails to do this then there must be
some form of sanction.

The EU court has ruled that the
UK had not applied this law properly when it said that employers only had to
consult the workforce when there was a trade union recognised by the employer.
This was a breach of the EU law because that law required workers to be
consulted about mass redundancies whether there was a trade union representing
the workforce or not, and whether the trade union was recognised by the
employer or not. Also the UK had not provided enough of a sanction for
employers who breached the law. While employers were in principle subject to a
fine for breaking the law, they could deduct it from the redundancy payments
which they had to pay to workers anyway.

If a business goes broke, EU legislation provides that a minimum amount
of workers’ back pay which may be owing at the time of insolvency has to be guaranteed.
This law also requires a basic protection of occupational pensions where
businesses go broke. The key EU court case of Robins said that the UK was not doing enough to protect pensions in
such cases. British law was changed as a result.

Another issue addressed by EU law
is so-called ‘atypical work’.
This refers to work which is different from the traditional full-time
open-ended contract with one employer. In particular, there are different EU
laws for three types of atypical work: part-time work, fixed-term work and
agency workers. There are no EU laws on ‘zero-hour’ contracts or internships,
however.

Basically these EU laws say that
the atypical workers who are covered by them should be treated equally with
regular employees as regards their pay and conditions. Also, employers should
make it easier for part-time workers or agency workers to join the regular
workforce, and for full-time workers to switch to part-time work if they
wish. For fixed-term workers, there must
be limits on the number of times a contract can be renewed over and over, to
protect against exploitation.

Finally, another issue addressed
by EU laws is worker consultation and
information. There is both a general law on worker consultation and
information in large companies, and a specific set of rules of ‘European works
councils’, which applies to multinational companies with over 1000 employees
across the EU. These laws allow the employers and the workforce to reach
alternative arrangements if they wish. There are no EU rules requiring small
businesses to inform and consult their workers, except in the special case
where the employee contracts are transferred.

Discrimination law

There are EU laws banning discrimination
on six grounds: sex, race, age, disability, religion and sexual orientation.
The laws on sex and race discrimination go beyond employment, and also ban sex
or race discrimination in access to goods or services, like insurance. However,
the laws on the other four grounds only extend to discrimination in employment.

These laws ban direct
discrimination, ie discrimination purely based on someone’s age, race, sex,
etc. However, they also ban indirect
discrimination: unequal treatment for another
reason, but which mostly affects people of a particular age, sex, etc. For
instance, unequal treatment of part-time workers will affect both male and female
workers, since there are some men working part-time. But it mostly affects women, since they make up
the majority of part-time workers. So it would be an example of indirect sex
discrimination, although since the adoption of an EU law devoted to the issue
of part-time workers (see above in this chapter), the sex discrimination angle
is no longer as relevant.

How do these laws affect the UK?
As noted above, the UK usually had laws on these issues before the EU did.
However, the EU laws have had an impact on some of the details that are
important to large numbers of individual cases.

Looking at the case law of the EU
court, there have been important rulings which improved UK standards in
particular on:

equal pay for work of equal
value;

prohibiting the dismissal of
women earlier than men due to retirement age difference;

effective remedies (removing the
cap on damages for sex discrimination);

dismissal due to pregnancy;

equal treatment after returning
from maternity leave; and

dismissal of transsexuals.

Effect of Brexit

Leaving the EU has no automatic effect on employment law. But a number
of Brexit supporters, including cabinet ministers like the employment minister,
have specifically
stated that they want to use the opportunity that Brexit would create in
order to remove protections guaranteed by EU law.

In particular, in their own words, they aspire to scrap the laws on: collective redundancies; atypical workers;
working time (including paid holidays); driving time limits for the
self-employed; rights for pregnant workers and women on maternity leave; and worker consultation rights.

For his part, Nigel Farage has argued that women who have children are
‘worth less’ to an employer.

It should be noted that changes like these would not even have to go
through as an Act of Parliament – Vote Leave supporters plan to fast-track the
abolition of EU laws after Brexit.

Conclusion

As we have seen, EU law has had a demonstrable impact on UK employment
and discrimination law. It is not the source of all UK law but it definitely
provides protection which would not otherwise exist in certain areas, such as
holiday pay and equality for women in the workplace. It is highly likely, based
on the expressed intentions of senior supporters of Brexit, that there would be
a ‘bonfire’ of some of these rights after Brexit.

The following is a list of all EU court cases
involving UK employment and equality law. I have grouped them by topic and
indicated for each case what the subject matter was, and whether the UK law was
in breach of EU law or not in each case.

Equality at
work – 32 breach, 23 no breach: breach of EU law in 55% of cases

1 comment:

For three years I was discriminated against by UK central government (!) on pay, sickness benefit and holiday entitlement until the Temporary Agency Work Directive 2008/104/EC kicked in. (UK employers still have a residual discretion perpetually to deny their 'agency' workers sickness benefit…)